Guilty: Former Ohio House Speaker Larry Householder, ex-Ohio GOP chairman Matt Borges convicted in $60M bribery scheme

© Jake Zuckerman/cleveland.com/TNS U.S. Attorney for the Southern District of Ohio Ken Parker reads a statement after a jury convicted ex-Ohio House Speaker Larry Householder and lobbyist Matt Borges of racketeering. He's flanked by the prosecutors who tried the case, from left to right: Matt Singer, Megan Gaffney Painter, and Emily Glatfelter.

CINCINNATI – A jury on Thursday convicted ex-Ohio House Speaker Larry Householder and lobbyist Matt Borges of taking part in a bribery scheme prosecutors say was engineered to pass a $1.3 billion bailout of two nuclear power plants owned by a subsidiary of Akron-based FirstEnergy Corp.

Federal prosecutors in July 2020 accused Householder, 63, a Republican who was then one of the most powerful politicians in state government, of secretly controlling Generation Now, a nonprofit that received $60 million from FirstEnergy.

Generation Now spent that money engineering Householder’s rise to power, running an ad campaign to back the legislation, and thwarting an attempt to repeal the bill. About $514,000 from Generation Now also paid down Householder’s legal debts, credit card bills, and repairs to his Florida home, according to bank records shown at trial.

“The jury has spoken, unanimously and as a whole,” said U.S. District Judge Timothy Black after he read the verdict.

Neither Householder nor Borges revealed any emotion as the verdict was read.

Since the case first became public nearly three years ago, prosecutors have said it represented the largest public corruption scheme in Ohio history, a cash-for-legislation scam they said personally enriched five conspirators and propped up a utility’s struggling nuclear operation on the backs of all Ohio electric customers.

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The historic conviction Thursday serves as a rebuke against companies seeking to spend money anonymously to influence state politics and the politicians who execute creative means to push the limits of campaign finance laws.

“You cannot sell the public trust and you cannot conspire with others to do so,” said U.S. Attorney for the Southern District of Ohio Ken Parker, flanked by the federal prosecutors who tried the case.

Householder was convicted of racketeering, which required prosecutors to prove Householder led a team on a pattern of illegal conduct such as wire fraud, bribery, and money laundering. Borges also was convicted of racketeering for his role in bribing an opposing political operative for inside information.

The two men will be sentenced by Black at a later date. Each faces up to 20 years in prison.

Speaking briefly with reporters after the verdict was delivered, Householder reiterated a key piece of his defense: that House Bill 6 – the corporate bailout he delivered FirstEnergy in exchange for bribes – was a “good piece of legislation.” He called the verdict the “first step in a process” as his attorneys indicated plans to appeal.

© Jake Zuckerman/cleveland.com/TNS Former Ohio House Speaker Larry Householder speaks to reporters outside the federal courthouse in Cincinnati on Thursday March 9, 2023, after he was convicted of racketeering.

Three witnesses were key to the prosecutors’ case against Householder:

• Jeff Longstreth – the signatory on Generation Now’s accounts who described himself as the quarterback of Householder’s political operation – testified against his former boss. He said he personally executed direct payments to Householder with the expectation of repayment that never came. Longstreth oversaw the campaigns of a slate of Republican House candidates who were needed to win Householder the speaker’s office and pass House Bill 6 in the process. He earned millions of dollars through Generation Now before pleading guilty in October 2020.
• Juan Cespedes lobbied for FirstEnergy Solutions, the subsidiary that owned the two nuclear plants. He served as a key middleman, ferrying tens of millions from the company into Generation Now. That includes a $400,000 check written to Generation Now that he said FirstEnergy Solutions lobbyists slid across a table to Householder while discussing their interest in a nuclear bailout.
• FBI Special Agent Blane Wetzel, who issued more than 250 subpoenas, oversaw undercover FBI agents, confidential informants, and wire taps in the sprawling investigation. He walked jurors through bank records showing the money trail from FirstEnergy through a maze of dark money political nonprofits. That money all went to one of three goals: shoring up Householder’s power, passing HB6, and enriching Generation Now’s people.

Defending himself at trial, Householder adamantly and defiantly rejected any notion of impropriety. He denied that he wielded any control over spending from Generation Now, claiming its dominion belonged to Longstreth. He said he never promised FirstEnergy anything in exchange for its contributions to the nonprofit. And he repeatedly defended HB6 on the merits, arguing the bailout protected jobs, the tax base in the area that would dry up if the plants closed, and shielded the area from ensuing job loss.

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Prosecutors also brought to the witness stand a political operative who said Borges attempted to bribe him with a $15,000 check in exchange for inside information about the repeal campaign that threatened HB6.

Tyler Fehrman worked for a firm called Advance Micro Targeting, a niche business that specializes in ballot issue campaigns. He said Borges offered to pay him for information about how the signature-collection effort was going. The offer perturbed Fehrman enough to contact the FBI and, eventually, secretly record his conversations with Borges, once his friend and mentor.

Jurors watched footage of Borges passing off a $15,000 check to Fehrman, as Borges peppers his younger counterpart with questions about what the “statewide number” is. Borges argued the payment was not a bribe, but him frontloading payment to a friend who was in personal debt in exchange for work in the future.

In an interview, Borges said it wasn’t the verdict he was expecting, but he’s thankful to have had a fair opportunity to be heard. He suggested plans to appeal but said he still needs to review his options with his attorneys.

At trial, Borges declined to testify in his own defense. He said Thursday he felt no need to second guess that decision. But when asked twice in an interview, he didn’t directly answer whether he paid Fehrman a bribe.

“I never believed that those conversations were criminal in nature, certainly not that I was joining any ongoing criminal racketeering conspiracy,” he said. “I just never believed that. Those conversations are what they are. They’re open to interpretation.”

He took the call on the drive home from Cincinnati to the Columbus area. When he gets there, he said he intends to have a conversation with his daughter.

Read More: Ongoing coverage of the federal corruption trial of former Ohio House Speaker Larry Householder

While Householder, Borges and their allies now face prison time, none of the FirstEnergy executives who were involved in the scheme have faced charges. FirstEnergy admitted as a corporate entity to paying the bribes, via a deferred prosecution agreement that was not admitted into evidence at trial.

Parker declined to answer whether any FirstEnergy executives will be prosecuted for paying the bribes. FirstEnergy spokeswoman Jennifer Young offered comment in an email.

“While it would be inappropriate to comment on the verdict, FirstEnergy has taken decisive actions over the past several years to strengthen our leadership team and ensure a culture of strong ethics, integrity and accountability across the company,” she said.

After the arrests of Householder and his allies, House lawmakers quickly removed Householder as speaker. However, they declined to expel him from his chamber for nearly a year.

Bipartisan lawmakers voted to repeal two major pieces of HB6 – the nuclear subsidies, plus a “decoupling” provision that charges ratepayers up to $50 million per year to further subsidize FirstEnergy. However, they declined to repeal the other half of the bill – a bailout for two coal plants in Ohio and Indiana, plus a near-total gutting of Ohio’s clean energy laws. Despite holding the occassional hearing, lawmakers have shown no appetite for repealing the rest of the bill.

Householder previously served as speaker of the Ohio House from 2001 too 2004. He exited under cloud of an FBI investigation surrounding his use of campaign finance dollars, although he was never charged. He returned to state politics in 2016, an early supporter of then Republican presidential candidate Donald Trump.

He won the speaker’s vote with two key strains of support: the freshman Republicans he shepherded through open seat primaries, and the Democrats he courted to help him oust his Republican rival, Ryan Smith.

Jake Zuckerman covers politics and policy for Cleveland.com and The Plain Dealer. Read his work here.

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